Sodastream Analysis

Introduction

In 1903, Guy Gilbey, a British gin distiller, founded what would later become a one hundred year old soft drink producing company. The innovative product would allow users to transform tap water into a flavored carbonated beverage in the convenience of their own home. With an affordable price, space-saving design and environmentally friendly production system, the company would become known as SodaStream (Journal, 2012).

The organization would go through several incarnations during its evolving life cycle. By the 1970’s the catch phrase “Get busy with the Fizzy” would help boost the company’s sales, revenues and notoriety. However, it wasn’t until the hiring of Daniel Birnbaum, former chief executive officer of the Nike Company, in 2007 that would launch the company into a competitive marketing war with two of the biggest brand giants in the world, Coca-Cola and PepsiCo, the “Big Two” (Journal, 2012)

Headquartered in Israel and with manufacturing sites in Australia, China, Germany and South Africa, the company now operates in 43 countries and sells their kitchen appliance in more than 55,000 stores around the world (SodaStream, 2013).

Article Summary

Chief executive officer Daniel Birnbaum’s goal to penetrate the United States market with the SodaStream kitchen appliance became quite clear in the beginning of 2012 when SodaStream created a public display in South Africa of soft drink cans and bottles in a demonstration of waste and corporate social responsibility. Then, at the end of 2012 when interviewed, Birnbaum publicly attacked the business model and environmental standards of his two biggest rivals, Coca-Cola and PepsiCo (Journal, 2012).

Industry and Nation Applications: SWOT Analysis

The carbonated soft drink industry (CSD) accounts for more than $18.3 billion in revenue (Beverage Industry, 2012). Formally defined by the Federal Trade Commission, CSDs are “beverages manufactured by combining flavoring concentrate, sweetener, and carbonated water.”

They are marketed and distributed to retailers and vendors. “The bottlers’ own employees place their CSDs on the retailers’ shelves, price the products, and insure that point of sale signs are properly displayed using this store-door delivery system” (FTC, 1999).

SodaStream is considered the underdog in their David and Goliath approach to take on competitors such as PepsiCo and Coca-Cola. Yet the big names in the carbonated-beverage industry are showing a chink in their armor. Based upon the declining per-capita soft-drink consumption volumes, which dropped to their lowest volumes since 1987, combined with an increasing price-sensitive and environmentally-aware society, the timing of SodaStream’s strategic expansion could not be better (Journal, 2012).

Strengths